On Friday 15 September in Santiago de Compostela, the finance ministers of the eurozone countries will review the macroeconomic situation in the light of recent macroeconomic data such as the European Commission’s summer economic forecasts (see EUROPE 13247/1).
By reducing its growth forecasts from 1.1% to 0.8% of GDP for 2023, the EU institution is predicting a sharper economic slowdown than envisaged in May, due to the recession that is taking hold in Germany (-0.4% of GDP).
“This loss of momentum, already visible before the summer, will continue” due to weak external demand, noted a European source on Monday 11 September. She also pointed to the “still high” level of inflation (5.3% in August), even though underlying price inflation (excluding energy and food prices) is tending to ease. These factors, combined with the continuing strength of the labour market, still demonstrate the “resilience” of the euro area economy in the face of macroeconomic and geopolitical uncertainties, she said.
According to this source, the Eurogroup declaration of mid-July remains relevant. Before the summer break, the twenty ministers had recommended “a restrictive fiscal stance” at Eurozone level for 2024, without however setting an average target for reducing public deficits (see EUROPE 13222/13). On Friday, the Eurogroup will not adopt a specific declaration.
ESM. The ministers will also be briefed on the latest developments in the Italian debate on ratification of the treaty revising the ‘European Stability Mechanism’ (ESM), the euro area’s permanent rescue fund.
Italy is the last country not to have ratified the reform that would place the ‘Single Resolution Fund’ (SRF), the financial arm of the ‘resolution’ strand of the banking union, under the safety net of the ESM (see EUROPE 13203/7). However, Giorgia Meloni’s Italian government sees the ESM as an instrument for imposing austerity in countries on financial life support. In the run-up to the European elections in June 2024, this position is unlikely to soften, given that the Italian Parliament has postponed discussions on reforming the ESM until November.
If the treaty revising the ESM is not ratified, the current treaty establishing the rescue fund will continue to apply.
ECB. Finally, the Eurogroup will discuss the candidacy of Italy’s Piero Cipollone, currently Deputy Governor of the Bank of Italy, for the position of member of the Executive Board of the European Central Bank (ECB) to replace his compatriot Fabio Panetta, who will become Governor of the Bank of Italy in November (see EUROPE 13239/18).
Mr Cipollone’s appointment to a non-renewable eight-year term of office is not expected to encounter any obstacles, as he is the only candidate in the running.
It will then be up to the EU Council to adopt a formal recommendation to the European Council, which will act by an enhanced qualified majority of Member States, after consulting the European Parliament and the ECB.
Together with the governors of the central banks of the euro area countries, the ECB’s Executive Board makes up the ECB’s Governing Council, which is responsible for approving the monetary policy of the Frankfurt-based monetary institution. (Original version in French by Mathieu Bion and Émilie Vanderhulst)